ATCO hydro power push into east coast
Canadian infrastructure player ATCO aims to bring a $500m pumped hydro facility in NSW online by 2025.
Canadian infrastructure player ATCO aims to bring a $500m pumped hydro facility in NSW online by 2025, the first step in a broader goal of creating a $2bn business on Australia’s east coast this decade.
ATCO, best known locally for operating Western Australia’s gas network, has bought the Central West hydro development at Yetholme, near Bathurst, from clean energy operator Altura Group.
It hopes to reach a final investment decision on the 325 megawatt project in early 2023, followed by two years of construction and first capacity in late 2025, the same year when the federal government-owned Snowy Hydro is due to bring on an extra 2000MW of capacity from its Snowy 2.0 expansion.
The move into renewables marks a major step in ATCO’s aim of replicating the scale of its $2bn WA business on the nation’s east coast in order to diversify revenues with a focus on hydro and potentially wind generation.
“We have a business investment on the west coast of around $2bn and we would like to build a similar-sized business on the east coast,” ATCO business development executive general manager Ben Bolot told The Australian.
The proposed hydro facility with 2600MW hours, or up to eight hours of storage, will be located near the NSW government’s Central-West Orana Renewable Energy Zone, which hopes to attract $5.2bn of investment and 3000MW of new capacity by the mid 2020s.
NSW has set out plans for five renewable energy zones as part of a blueprint to create 9000 jobs and attract $32bn in private investment as coal-fired power plants begin to close in the coming years. A state grants program will focus on delivering 3000MW of pumped hydro, which involves storing water in a reservoir and releasing it through a series of turbines to create electricity.
ATCO said it would open talks with the NSW government over the project achieving critical state infrastructure status and potentially qualifying to be underwritten as part of the state’s energy blueprint.
“The NSW electricity road map had a couple of buckets interesting to us: one is grant money available for pre-feasibility that have been announced after 2018 and also longer-term energy offtake contracts which provide the certainty for projects such as these,” Mr Bolot said.
ATCO has also signed an ongoing development services deal with previous owner Altura to work together delivering the project online.
Renewables output continues to boom in Australia, with operational capacity passing 10 gigawatts for the first time. “2020 was a stellar year for utility-scale wind and solar in the national electricity market. By our estimates, fully operational capacity passed 10GW for the first time, and 3.5GW of new projects connected to the grid, making it easily the biggest year for utility scale renewables in Australia,” ITK’s Ben Willacy said as part of consultancy GlobalRoam’s Generator Statistical Digest, to be published on Monday.
Coal plants, which provide 70 per cent of electricity, still dominate price setting in the national electricity market, but renewables are making inroads.
“All states, with the exception of South Australia, saw a marked increase in the role of wind and solar assets in the price-setting process through 2020,” Mr Willacy said. The most dramatic increases were in NSW, up more than 250 per cent on the year before, and in Victoria, up by more than 500 per cent.”